Balloon crash deepens pall on tourism-dry Luxor

LUXOR, Egypt (AP) -- The fiery crash of a sightseeing balloon that killed 19 tourists has cast a further pall over this city of ancient temples and tombs, already perhaps the hardest hit by Egypt's two-year drop in tourism, which has left hotels here empty and residents desperate for income.

Some connected to the tourist trade in Luxor, a city utterly dependent on foreign visitors to survive, were seething with anger Wednesday at the country's Islamist president for his silence over the crash.

Mohammed Morsi has yet to publicly speak about the tragedy -- and some here took that not just as insensitivity to the victims' families but as indifference to the vital tourism trade.

"Morsi should have taken a plane and come here," Salah Zaky, one of the owners of the five-star Steigenberger Hotel in Luxor , 510 kilometers (320 miles) south of Cairo . "The whole world is watching and he is asleep. It's as if there is no government."

Morsi spoke by telephone to Luxor's governor to discuss the balloon disaster, according to state media. Hours after the crash, he spoke live on TV at a meeting with political leaders -- but only about upcoming parliamentary elections, without mentioning the crash.

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"They don't care if this hotel closes. They only care about the ballot box," Zaky said, referring to the Muslim Brotherhood, the fundamentalist group from which Morsi hails and which has dominated all elections held since Mubarak's ouster.

Nine of those who died in Tuesday's crash were in a tour group from Hong Kong that was staying at the Steigenberger. The husband of one of the victims had chosen not to go on the balloon ride and watched from the ground as it burst into flame and plummeted to the earth, with his wife, daughter, sister and brother-in-law on board, hotel staffers said. The man flew out of the country Tuesday evening.

Investigators were still gathering evidence about the cause of the crash, the head of the probe Walid el-Moqadem told The Associated Press, refusing to give details. He said investigators had not yet questioned the balloon's pilot, who survived the crash with severe burns.

"He could barely open his eyes," el-Moqadem said.

The hot air balloon was carrying 20 tourists from Hong Kong, Japan, Britain, Belgium and France on a sunrise flight over Luxor's dramatic pharaonic sites and desert landscape.

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The disaster occurred when it was trying to land, just after 7 a.m. Tuesday. Initial investigations suggested that the fire broke out when a landing cable tore one of the balloon's fuel tubes, used to fire the burner that heats the air in the balloon. Investigators said it appeared the pilot jumped out of the balloon's gondola when the fire first broke out, still relatively close to the ground. The investigators spoke on condition of anonymity because the probe was not complete.

The balloon then rose back up, to some 300 meters (1,000 feet), the fire spread to the balloon itself, which burst. Amateur video taken from another balloon flying nearby shows it crashing it back to the earth like a fireball.

The only other survivor was a tourist from Britain, who may have gotten out at the same time as the pilot. He and the pilot were being treated in military hospitals in Cairo, as families of some of the victims arrived in the country to identify their loved ones.

For residents of Luxor, the main city in a province of around 1 million people, the tragedy only further added to their worries over the tourism trade on which they rely. Tourism is the main employer in the area -- and practically the only industry besides farming and a sole sugar factory processing the region's sugar cane crops.

Nearly everyone relies in some way on the visitors who come to visit the monumental ancient temples in Luxor and the Valley of the Kings, the desert valley where many of ancient Egypt's pharaohs, including Tutankhamun, were buried.

With little else to keep it going, the city has been hit hard with many foreign visitors staying away from Egypt amid the turmoil, protests and instability that have plagued the country since the fall of autocrat Hosni Mubarak in February 2011.

The number of tourists coming to Egypt fell to 9.8 million in 2011 from 14.7 million the year before, and revenues plunged 30 percent to $8.8 billion. Last year, the numbers climbed up to just over 10 million, but most tourists go to the beach resorts of the Red Sea, staying away from Nile Valley sites like Luxor.

In Luxor, "when tourism stalls, it affects the tour agents, the drivers, the boat owners, vegetable and fruit sellers, the groceries, the butchers and everybody else who are part of the cycle of life of tourism," said tour agent Medhat Ramadan, who nervously checked his IPad for the latest news on the crash.

"Even farmers who plant the food for horses that drive tourists in carriages are affected. It's all one cycle," he said.

Along with the depressed tourism, Egypt's economy in general has suffered amid the political turmoil. Constant protests, often turning into riots or clashes, along with political uncertainty, have dried up foreign investment. Foreign reserves, a key indicator for the economy's health, have shrunk by two thirds since Mubarak's ouster in February 2011.

The crash had one immediate effect with the suspension of all balloon rides in the area.

"This was one of the pillars of tourism here in Luxor. Now it is gone," said Ramadan. With tour companies forced to offer cheaper and cheaper packages to draw visitors to the city, offering balloon rides -- which draw a higher price -- was one way to pull in extra money for the companies, he said.

For months, hotels here have been reporting occupancy rates below 30 percent -- often well below, even in the winter high season, when normally they are nearly full.

Zaky said the Steinberger has averaged only 25 percent occupancy and has had to cut a quarter of its 400-member staff. At the same time, his gas bill has doubled and electricity costs rose 20 percent in recent months because of price hikes by a government trying to close rampant deficits.

Hesham Youssef, who runs a sailboat offering trips for tourists on the Nile River, said he sometimes goes for three days without a client.

He said Morsi is good -- "a man of the poor, he always mentions God's name." But, Youssef said, "he needs to come out and say something about what happened to those tourists. It is not his fault because what happened was something from God, but he must say something."

Tharwat Agamy, from Luxor's Tourism Chamber, said there was no immediate word on cancellation as a result of the balloon crash, but he feared they would soon happen.

"The whole world is talking about this right now. We are doing our best to push tourism forward but this will take us back many steps back,' he said.